US businessman arrested for smuggling $300 million worth of AI chips to China

Arrest of Earthmade Computer founder

US authorities have indicted 38-year-old Greg Louis, owner and chief executive of Earthmade Computer Inc. He was arrested in California on 1 October, while the indictment was approved on 29 September. According to the US Department of Justice, Louis organised illegal shipments of high-performance servers with American processors to China, circumventing existing export restrictions. The total value of the equipment exported under this scheme exceeded $300 million.

Mechanism for circumventing sanctions

The investigation established that the scheme operated from October 2023 to August 2026. Earthmade and other US companies purchased servers from three manufacturers within the United States. Since direct shipment of processors to China required a special export licence, the equipment was first sent to Malaysia and Singapore, where such permits were not mandatory.

After arriving in these countries, the servers were forwarded to China and Hong Kong. Transport documents listed the transit states as the destination, rather than the final recipient in China. According to the prosecution, Louis acted as an intermediary between foreign buyers and US suppliers.

Technical details and financial flows

The case materials mention specific electronic models: Nvidia A100 and H100 processors, as well as PNY GeForce RTX 4090 and RTX 5090 graphics cards. Part of the goods was exported under code 4A090.a, while in August 2026, categories 5A002.z and 5A992.z also appeared in the shipments. Nvidia is named in the case solely as a component manufacturer and is not being held liable for participation in the scheme.

Financial operations matched the scale of the smuggling. From January to October 2024 alone, Earthmade received over $176 million from two Malaysian freight forwarders.

Specific episodes of the case

One episode was reconstructed based on correspondence and other documents. Louis purchased 27 servers with export-restricted GPUs from a US manufacturer for approximately $7.6 million, specifying Malaysia as the delivery location. After receiving the equipment, his partner informed a Malaysian representative that all 27 machines had been transferred to China.

In another instance, 92 servers travelled a route via Singapore and Malaysia, and then through Hong Kong. Another batch consisted of 100 servers equipped with Nvidia H100s, with a total value of over $22 million.

Charges and investigation

Greg Louis faces three federal charges: conspiracy to violate export laws, conspiracy to launder money, and smuggling during the export of goods from the US. The first two counts carry a penalty of up to 20 years in prison each, while the third carries up to 10 years. Prosecutors are also seeking the forfeiture of assets related to this activity.

The investigation is being conducted jointly by the Bureau of Industry and Security of the US Department of Commerce, the criminal investigations division of the Department of Defence, and the counterintelligence division of the FBI.